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inflation

inflation

Inflation - an increase in the general level of prices in an economy is an important economic indicator, the control of which is the primary object of stewsinc at eol.ca" class="wiki wiki_page">monetary policy. Inflation reduces the purchasing power of money within an economy. The opposite on inflation is deflation or a rise in the purchasing power of any given amount of money. Zero or low inflation also known as price stability is a frequent objective of stewsinc at eol.ca" class="wiki wiki_page">monetary policy. Inflation is usually measured by the rate at which money loses purchasing power in a year, known as the annual inflation rate: 4% per year.

[+] Causes of inflation

[+] Impacts of inflation:


stewsinc at eol.ca" class="wiki wiki_page">monetary policy, interest rate, money supply, unemployment, economic policy, investment.

Position: Keep inflation at 0% (a fixed money supply)


Position: Keep inflation between 2% and 4% (low inflation).


Position: target inflation between 5% and 15% (moderate inflation).


Position: Don't worry about inflation, worry about employment.


[+] Position: Reducing inflation has certain costs and uncertain benefits.

sources and resources